SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Cone Mills Corporation
--------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-0367025
-------------------- ---------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
3101 North Elm Street
Greensboro, North Carolina 27408
- ---------------------------------- -------
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b)
of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
-------------------- -------------------------------
Rights to Purchase Class B Preferred New York Stock Exchange
Stock (Series A)
If this form relates to the registration of a class of
securities pursuant to Section 12 (b) of the Exchange Act and is effective
pursuant to General Instruction A.(c), check the following box. [ ]
If this form relates to the registration of a class of
securities pursuant to Section 12(g) of the Exchange Act and is effective
pursuant to General Instruction A.(d), check the following box. [ ]
Securities Act registration statement file number to which this form relates:
N/A (if applicable)
----
Securities to be registered pursuant to Section 12(g) of the Act:
None
-----
(Title of class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
The following summaries of certain provisions of the Rights Agreement
do not purport to be complete and are subject, and are qualified in their
entirety by reference, to all the provisions of the Rights Agreement, including
the definitions therein of certain terms.
On October 14, 1999, the Board of Directors of Cone Mills Corporation
(the "Corporation") authorized and declared a dividend distribution of one right
(a "Right") for each outstanding share of common stock, par value $0.10 per
share, of the Corporation ("Common Stock") to shareholders of record at the
close of business on October 25, 1999 (the "Record Date"). Each Right entitles
the holder of Common Stock to purchase from the Corporation a unit (a "Unit")
consisting of one one-hundredth of a share of Class B Preferred Stock (Series A)
of the Corporation (the "Preferred Stock") at a purchase price of $30 per Unit
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement (the "Rights Agreement"), dated as
of October 14, 1999, between the Corporation and First Union National Bank, as
Rights Agent.
Initially, the Rights will be attached to Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) ten days following public
announcement that a person or group of affiliated or associated persons, with
such exceptions as are set forth in the Rights Agreement (an "Acquiring
Person"), has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the "Stock Acquisition
Date") or (ii) ten Business Days (or such later date as the Board of Directors
may determine) following the commencement of, or first public announcement of
the intent of a person or group to commence, a tender offer or exchange offer
that would result in a person or group (with such exceptions as are set forth in
the Rights Agreement) beneficially owning 20% or more of the outstanding shares
of Common Stock. Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
October 25, 1999 will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding at the close of business on October 25, 1999 or thereafter
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
An Acquiring Person does not include (i) the Corporation, any
subsidiary of the Corporation, any employee benefit plan or employee stock plan
of the Corporation or of any subsidiary of the Corporation or (ii) any person or
group whose ownership of 20% or more of the shares of Common Stock then
outstanding results solely from any action or transaction or series of related
actions or transactions approved by the Board of Directors before such person or
group became an Acquiring Person.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 13, 2009 unless earlier redeemed or
exchanged by the Corporation as
<PAGE>
described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to the holders of record of Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock outstanding prior to the
Distribution Date will be issued with Rights.
In the event that an Acquiring Person becomes the beneficial owner of
20% or more of the then outstanding shares of Common Stock, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Corporation) having a value equal to two times the Exercise Price of the Right.
The Exercise Price is the Purchase Price times the number of shares of Common
Stock associated with each Right (initially, one). Notwithstanding any of the
foregoing, following the occurrence of an event set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the occurrence of an event
set forth in this paragraph until such time as the Rights are no longer
redeemable by the Corporation as set forth below.
In the event that, following the Stock Acquisition Date, (i) the
Corporation is acquired in a merger or consolidation in which the Corporation is
not the surviving corporation, (ii) the Corporation engages in a merger or
consolidation in which the Corporation is the surviving corporation and the
Common Stock of the Corporation is changed or exchanged, or (iii) more than 50%
of the Corporation's assets or earning power is sold or transferred, each holder
of a Right (except Rights that have previously been voided as set forth above)
shall thereafter have the right to receive, upon exercise of the Right, common
stock of the acquiring company having a value equal to two times the Exercise
Price of the Right.
The Purchase Price payable and the number of Units of Preferred Stock
or other securities or property issuable upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or securities convertible into
Preferred Stock at less than the current market price of the Preferred Stock, or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Units of Preferred
Stock issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a dividend on the Common Stock
payable in Common Stock or subdivisions or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustments in the Purchase Price will be
required until
<PAGE>
cumulative adjustments amount to at least 1% of the Purchase Price. No
fractional Units are required to be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Stock, the Board of Directors may
exchange the Rights (other than Rights owned by such person or its affiliates
and associates, which have become void), in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-hundredth of a share of Preferred
Stock (or of a share of a series of the Corporation's preferred stock having
equivalent preferences, limitations and relative rights), per Right (subject to
adjustment).
At any time until ten Business Days following the Stock Acquisition
Date, the Corporation may redeem the Rights in whole, but not in part, at a
price of $.01 per Right, subject to adjustment. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
Except as set forth below, any of the provisions of the Rights
Agreement may be amended at the direction of the Board of Directors prior to the
Distribution Date. After the Distribution Date, any provision of the Rights
Agreement may be amended at the direction of the Board of Directors without the
approval of holders of Rights Certificates to make changes that do not adversely
affect the interests of holders of Rights Certificates (excluding the interests
of any Acquiring Person) or to shorten or lengthen any time period under the
Rights Agreement, except that no amendment to lengthen the time period governing
redemption may be made at such time as the Rights are not redeemable nor may any
other time period be lengthened except to protect the rights of holders of
Rights. In no case, however, may the Rights Agreement be amended to change
(other than pursuant to certain adjustments therein) the fraction of a share of
Preferred Stock for which a Right is exercisable or to advance the Final
Expiration Date.
As of October 25, 1999, there were 25,485,717 shares of Common Stock
outstanding, and there were 1,531,700 shares of Common Stock reserved for
issuance under various stock plans of the Corporation or its subsidiaries.
500,000 shares of Preferred Stock have been reserved for issuance upon exercise
of the Rights.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Corporation on terms not approved by the Board of Directors of the Corporation.
The Rights should not interfere with any merger or other business combination
approved by the Board of Directors of the Corporation since the Board of
Directors may, at its option, at any time prior to the close of business on the
earlier of (i) the tenth business day following the Stock Acquisition Date or
(ii) October 13, 2009 redeem all, but not less than all, of the then outstanding
Rights at the Redemption Price. The Restated Articles
<PAGE>
of Incorporation of the Corporation provide for a classified Board of Directors.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit B the Form of
Rights Certificate, is attached as an exhibit hereto and is incorporated herein
by reference. The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to such exhibit.
Item 2. Exhibits.
Exhibit No. Description
1 Rights Agreement, dated as of October 14, 1999,
between Cone Mills Corporation and First Union
National Bank, as Rights Agent. The Rights Agreement
includes the Form of Articles of Amendment with
respect to the Class B Preferred Stock (Series A) as
Exhibit A, the Form of Rights Certificate as Exhibit
B, and the Summary of Rights as Exhibit C.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
CONE MILLS CORPORATION
By /s/ Neil W. Koonce
--------------------
Neil W. Koonce
Vice President,
General Counsel and
Secretary
Date: October 29, 1999
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1 Rights Agreement, dated as of October 14, 1999,
between Cone Mills Corporation and First Union
National Bank, as Rights Agent. The Rights Agreement
includes the Form of Articles of Amendment with
respect to the Class B Preferred Stock (Series A) as
Exhibit A, the Form of Rights Certificate as Exhibit
B, and the Summary of Rights as Exhibit C.
CONE MILLS CORPORATION
and
FIRST UNION NATIONAL BANK
Rights Agent
--------------------
Rights Agreement
Dated as of October 14, 1999
i
<PAGE>
Table of Contents
Section 1. Certain Definitions.............................................1
Section 2. Appointment of Rights Agent.....................................4
Section 3. Issue of Rights Certificates....................................4
Section 4. Form of Rights Certificates.....................................6
Section 5. Countersignature and Registration...............................7
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.............................................7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...8
Section 8. Cancellation of Rights Certificates............................10
Section 9. Reservation and Availability of Capital Stock..................10
Section 10. Preference Stock Record Date...................................12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights............................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....20
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...............................................20
Section 14. Fractional Rights and Fractional Shares........................22
Section 15. Rights of Action...............................................24
Section 16. Agreement of Rights Holders....................................24
Section 17. Rights Certificate Holder Not Deemed a Shareholder.............25
Section 18. Concerning the Rights Agent....................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent......26
Section 20. Duties of Rights Agent.........................................26
Section 21. Change of Rights Agent.........................................29
Section 22. Issuance of New Rights Certificates............................29
Section 23. Redemption and Termination.....................................30
Section 24. Exchange.......................................................31
Section 25. Notice of Certain Events.......................................33
Section 26. Notices........................................................33
Section 27. Supplements and Amendments.....................................34
Section 28. Successors.....................................................35
Section 29. Determinations and Actions by the Board of Directors, etc......35
Section 30. Benefits of this Agreement.....................................35
Section 31. Severability. .................................................35
Section 32. Governing Law..................................................36
Section 33. Counterparts...................................................36
Section 34. Descriptive Headings...........................................36
Exhibit A FORM OF ARTICLES OF AMENDMENT ................................A-1
Exhibit B FORM OF RIGHTS CERTIFICATE....................................B-1
Exhibit C FORM OF SUMMARY OF RIGHTS.....................................C-1
1
<PAGE>
RIGHTS AGREEMENT, dated as of October 14, 1999 ("Agreement"), between
Cone Mills Corporation, a North Carolina corporation (the "Corporation"), and
First Union National Bank, a national banking association, as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent hereunder).
W I T N E S S E T H
WHEREAS, on October 14, 1999, the Board of Directors of the Corporation
authorized and declared a dividend distribution of one Preferred Stock Purchase
Right (each, a "Right") payable on November 1, 1999 for each share of common
stock, par value $.10 per share, of the Corporation (the "Common Stock")
outstanding at the close of business on October 25, 1999 (the "Record Date");
and authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) for each share of
Common Stock of the Corporation issued between the Record Date and the
Distribution Date (as hereinafter defined), each Right initially representing
the right to purchase one one-hundredth (1/100) of a share of Class B Preferred
Stock (Series A) of the Corporation, having the preferences, limitations and
relative rights set forth in the form of Articles of Amendment attached hereto
as Exhibit A, upon the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding,
but shall not include (i) the Corporation, any Subsidiary of the Corporation,
any employee benefit plan or employee stock plan of the Corporation or of any
Subsidiary of the Corporation, or any trust or other entity organized,
appointed, established or holding Common Stock for or pursuant to the terms of
any such plan, or (ii) any Person, together with all Affiliates and Associates
of such Person, who or which would be an Acquiring Person solely by reason of
(x) being the Beneficial Owner of shares of Common Stock, the Beneficial
Ownership of which was acquired by such Person pursuant to any action or
transaction or series of related actions or transactions approved by the Board
of Directors of the Corporation before such Person otherwise became an Acquiring
Person, or (y) a reduction in the number of issued and outstanding shares of
Common Stock pursuant to a transaction or a series of related transactions
approved by the Board of Directors of the Corporation (provided that, in case
the Person set forth in clause (ii) does not become an Acquiring Person by
reason of clause (x) or (y) above, such Person set forth in clause (ii) shall
nonetheless become an Acquiring Person upon acquisition of any additional shares
of Common Stock unless such acquisition of additional Common Stock will not
result in such Person or group becoming an Acquiring Person by reason of such
clause (x) or (y)). Notwithstanding the
1
<PAGE>
foregoing, if the Board of Directors of the Corporation determines in good faith
that a Person who would otherwise be an "Acquiring Person" as defined pursuant
to the foregoing provisions of this paragraph (a) has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of shares
of Common Stock so that such Person would no longer be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed an "Acquiring Person" for any purposes of this
Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in effect
on the date of this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 hereof (the "Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original Rights; (ii)
which such Person or any of such Person's Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other Person
(or any Affiliate or Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent as described in
the proviso to subparagraph (ii) of this paragraph (c)) or disposing of any
voting securities of the
2
<PAGE>
Corporation; provided, however, that nothing in this paragraph (c) shall cause a
Person engaged in business as an underwriter of securities to be deemed the
"Beneficial Owner" of, or to "beneficially own," any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of North Carolina are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00
p.m., North Carolina time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., North Carolina time, on the next
succeeding Business Day.
(f) "Common Stock" shall mean the common stock, par value $.10
per share, of the Corporation, except that "Common Stock" when used with
reference to any Person other than the Corporation shall mean the capital stock
of such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(g) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(h) "Preferred Stock" shall mean shares of Class B Preferred
Stock (Series A) of the Corporation, and, to the extent that there are not a
sufficient number of shares of Class B Preferred Stock (Series A) authorized to
permit the full exercise of the Rights, any other series of Class B Preferred
Stock of the Corporation designated for such purpose containing terms
substantially similar to the terms of the Class B Preferred Stock (Series A).
(i) "Section 11(a)(ii) Event" shall mean an event described
in Section 11(a)(ii) hereof.
(j) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(k) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Corporation or an Acquiring Person that an Acquiring Person has
become such.
(l) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which an amount of securities or other ownership
interests having voting power sufficient to elect at least a majority of the
directors or other persons performing similar
3
<PAGE>
functions are beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(m) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(n) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable upon prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date), or (ii) the close of business on the tenth business day (or such
later date as the Board of Directors of the Corporation shall determine) after
the date of the commencement of, or first public announcement of the intent of
any Person (other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan or employee stock plan of the Corporation or of any
Subsidiary of the Corporation, or any Person or entity organized, appointed or
established by the Corporation for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer, if upon consummation thereof, such Person
would be the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (c) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Corporation). The Corporation shall
give the Rights Agent prompt written notice of the Distribution Date. As soon as
practicable after the Distribution Date and receipt of written notice of the
Distribution Date from the Corporation, the Rights Agent will, at the expense of
the Corporation, send by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Corporation, one or more rights certificates, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Corporation may make the necessary and appropriate
rounding
4
<PAGE>
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of Common Stock as of the close of business
on the Record Date, at the address of such holder shown on the records of the
Corporation. With respect to certificates for Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for Common Stock and the registered holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the earlier
of the Distribution Date or the Expiration Date (as such term is defined in
Section 7 hereof), the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing such shares
of Common Stock shall also be deemed to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Cone Mills
Corporation (the "Corporation") and First Union National Bank (the
"Rights Agent") dated as of October 14, 1999 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of the Corporation.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Corporation will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
5
<PAGE>
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The Rights Certificates
shall be in a machine-printable format and in a form reasonably satisfactory to
the Corporation. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever distributed, shall be dated as of the Record
Date, show the date of countersignature, and on their face shall entitle the
holders thereof to purchase such number of one one-hundredths of a share of
Preferred Stock as shall be set forth therein at the price set forth therein
(such exercise price per one one-hundredth of a share, the "Purchase Price"),
but the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Corporation has
determined is part of a plan, arrangement or understanding that has the purpose
or effect of avoiding the provisions of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
The Corporation shall instruct the Rights Agent in writing of the Rights which
should be so legended and shall (to the extent feasible) supply the Rights Agent
with such legended Rights Certificates.
6
<PAGE>
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its President, any Vice President or Treasurer, either manually
or by facsimile signature, and shall have affixed thereto the Corporation's seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Corporation, either manually or by facsimile signature. The
Rights Certificates shall be countersigned by the Rights Agent manually and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Corporation who shall have signed any of the Rights Certificates shall
cease to be such officer of the Corporation before countersignature by the
Rights Agent and issuance and delivery by the Corporation, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Corporation with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such officer of
the Corporation; and any Rights Certificates may be signed on behalf of the
Corporation by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Corporation to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e),
Section 14 and Section 24 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of one one-hundredths of a share
of Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Corporation shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have
7
<PAGE>
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Corporation
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 14 and Section 24 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Corporation may require payment by holders of
the Rights of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Corporation and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate, if mutilated, the Corporation will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of one one-hundredths of a share (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) the close of business on October
13, 2009 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof or (iii) the date on which such Rights
are exchanged as provided in Section 24 hereof (the earliest of (i),(ii) and
(iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be $30,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-hundredth of a share of Preferred Stock (or
other securities, cash or other assets, as the case may be) to be purchased as
8
<PAGE>
forth below and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-hundredths of a share of Preferred Stock to be purchased
and the Corporation hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Corporation shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depository agent
depositary receipts representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depository agent) and the Corporation will direct the
depositary agent to comply with such request, (ii) requisition from the
Corporation the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to, or upon the order of, the registered holder of
such Rights Certificate. The payment of the Purchase Price (as such amount may
be reduced pursuant to Section 11(a)(iii) hereof) shall be made in cash or by
certified bank check or bank draft payable to the order of the Corporation. In
the event that the Corporation is obligated to issue other securities (including
Common Stock) of the Corporation, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Corporation will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. The
Corporation reserves the right to require prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Corporation has determined is part of a plan, arrangement or
understanding
9
<PAGE>
which has the purpose or effect of avoiding the provisions of this Section 7(e),
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Corporation shall use
all reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Corporation shall reasonably request.
Section 8. Cancellation of Rights Certificates. All Rights Certificates
surrendered for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Corporation or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Corporation shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Corporation.
Section 9. Reservation and Availability of Capital Stock.
(a) The Corporation will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities), the number of shares
of Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Corporation shall use its reasonable best
efforts to cause, from and after such time as the Rights become exercisable (but
only to the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
10
<PAGE>
(c) The Corporation shall use its reasonable best efforts to
(i) file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Corporation upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. The Corporation
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Corporation may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Corporation shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect, in each case with simultaneous written notice to the Rights
Agent. In addition, if the Corporation shall determine that a registration
statement is required following the Distribution Date, the Corporation may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective. The Rights Agent may assume, unless notified in writing to the
contrary by the Corporation, that any Right exercised is permitted to be
exercised under applicable law and shall have no liability for acting in
reliance upon such assumption.
(d) The Corporation will take all such action as may be
necessary to ensure that all one one-hundredths of a share of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Corporation will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Rights Certificates and of any certificates for
a number of one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) upon the exercise of Rights. The
Corporation shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other securities, as the
case may be) in respect of a name other than that
11
<PAGE>
of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a number of
one one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Corporation's satisfaction
that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Corporation are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Corporation are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
shareholder of the Corporation with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Corporation,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case
12
<PAGE>
may be, which, if such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books of the Corporation were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs that would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event
that any Person, alone or together with its Affiliates and Associates, becomes
an Acquiring Person, unless the event causing the 20% threshold to be crossed is
a transaction set forth in Section 13(a) hereof, then, promptly following the
occurrence of such event, proper provision shall be made so that each holder of
a Right (except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of a number of one
one-hundredths of a share of Preferred Stock, such number of shares of Common
Stock of the Corporation as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of one one-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by 50%
of the current market price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence (such number of
shares, the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock which are
authorized by the Corporation's Restated Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Corporation shall: (A) determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon the exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Corporation (including, without
limitation, shares, or units of shares, of preferred stock, such as the
Preferred Stock, which the Board of Directors of the Corporation has deemed to
have essentially the same value or economic rights as shares of Common Stock
(such shares of preferred stock being referred to as "Common Stock
Equivalents")), (4) debt securities of the Corporation, (5) other assets, or (6)
any combination of the foregoing, having an aggregate value equal to the Current
Value (less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board of Directors of the Corporation
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Corporation; provided, however, that
if the Corporation shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the later of (x)
the first
13
<PAGE>
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Corporation's right of redemption pursuant to Section 23(a) expires (the later
of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Corporation shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available), and then, if necessary, such
number of shares of Preferred Stock or fractions thereof (to the extent
available), and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. For purposes of the preceding sentence, the
term "Spread" shall mean the excess of (i) the Current Value over (ii) the
Purchase Price. If the Board of Directors of the Corporation determines in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Corporation may seek shareholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that action is to be taken
pursuant to the first and/or third sentences of this Section 11(a)(iii), the
Corporation (1) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek such shareholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of any
such suspension, the Corporation shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of each Adjustment Share shall be
the Current Market Price per share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the per share or per unit value of any Common Stock Equivalent
shall be deemed to equal the Current Market Price per share of the Common Stock
on such date.
(b) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or shares
having the same preferences, limitations and relative rights as the shares of
Preferred Stock ("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of Preferred
Stock or per share of equivalent preferred stock (or having a conversion price
per share, if a security convertible into Preferred Stock or equivalent
preferred stock) less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such Record Date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price,
14
<PAGE>
and the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Preferred Stock owned by or held for
the account of the Corporation shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Corporation shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Corporation is
the continuing corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend of the Corporation in compliance with Section
55-6-40 of the North Carolina Business Corporation Act), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price (as determined pursuant to Section
11(d)hereof) per share of Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such current market price(as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement
15
<PAGE>
by the issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have occurred prior to
the commencement of the requisite thirty (30) Trading Day or ten (10) Trading
Day period, as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors. If on any such
date no market maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board of Directors
of the Corporation shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, Current Market Price per share shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current Market
Price per share of Preferred Stock shall be determined in the same manner as set
forth above for the Common Stock in clause (i) of this Section 11(d) (other than
the last sentence thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described in clause
(i) of this Section 11(d), the Current Market Price per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held or
so listed or traded, Current Market Price per share of the Preferred Stock shall
16
<PAGE>
mean the fair value per share as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one-hundredth of a share of
Common Stock or other share or one ten-thousandth of a share of Preferred Stock,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-hundredths of
a share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to the nearest ten-
thousandth) obtained by (i) multiplying (x) the number of one one-hundredths of
a share covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of
17
<PAGE>
the Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one one-hundredth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Corporation shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Corporation shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Corporation, shall
cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Corporation, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Corporation, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a share which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Corporation shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable such number of one one-hundredths
of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Corporation may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Corporation, if any, issuable upon such exercise over
and above the number of one one-hundredths of a share of Preferred Stock and
other capital stock or
18
<PAGE>
securities of the Corporation, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Corporation shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly
for cash of any shares of Preferred Stock at less than the current Market Price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Corporation to holders of
its Preferred Stock shall not be taxable to such shareholders.
(n) The Corporation shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Corporation in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Corporation in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Corporation and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Corporation and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) After the Distribution Date, the Corporation will not,
except as permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Corporation shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
19
<PAGE>
combine the outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Corporation shall
(a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate, and
(c) mail, or cause the Rights Agent to mail, a brief summary
thereof to each holder of a Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in
accordance with Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Corporation shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Corporation in a
transaction that complies with Section 11(o) hereof), and the Corporation shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Corporation in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Corporation, and the Corporation shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or the Corporation or cash or any other property, or (z) the Corporation
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Corporation and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Corporation or any Subsidiary of the
20
<PAGE>
Corporation in one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that: (i) each holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such one one-hundredths of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Corporation pursuant to this
Agreement; (iii) the term "Corporation" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Corporation are
converted in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered
21
<PAGE>
under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and (2) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.
(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Corporation and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon exercise
f the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall, subject to the provisions of Section 7(e) hereof, thereafter become
exercisable in the manner described in Section 13(a).
(d) In no event shall the Rights Agent have any liability in
respect of any such Principal Party transactions, including, without limitation,
the propriety thereof. The Rights Agent may rely and be fully protected in
relying upon a certificate of the Corporation stating that the provisions of
this Section 13 have been fulfilled. Notwithstanding anything in this Agreement
to the contrary, the prior written consent of the Rights Agent must be obtained
in connection with any supplemental agreement that alters in any adverse manner
the rights or duties of the Rights Agent.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there may be
22
<PAGE>
paid to the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Rights selected by the Board of Directors of the Corporation. If
on any such date no such market maker is making a market in the Rights the fair
value of the Rights on such date as determined in good faith by the Board of
Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral multiples
of one one-hundredth of a share of Preferred Stock, which may, at the option of
the Corporation, be evidenced by depositary receipts) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share
of Preferred Stock, the Corporation may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-hundredth of a share of Preferred Stock. For purposes of this Section (b),
the current market value of one one-hundredth of a share of Preferred Stock
shall be one one-hundredth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Corporation shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common Stock,
the Corporation may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one (1) share of Common Stock. For
purposes of this Section 14(c), the current market value of one share of Common
Stock shall be the closing
23
<PAGE>
price of one share of Common Stock (as determined pursuant to Section 11(d)(i)
hereof) for the Trading Day immediately prior tithe date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Corporation and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Corporation and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
24
<PAGE>
(d) notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Corporation must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Corporation which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Corporation shall pay to the Rights Agent such
compensation as shall be agreed to in writing between the Corporation and the
Rights Agent for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also shall indemnify the Rights Agent, its directors,
officers, employees and agents, for, and to hold each of them harmless against,
any loss, liability or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent or such other indemnified party in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim (whether asserted by the Corporation, a
holder of Rights or any other Person) of liability in the premises. The
provisions of this Section 18(a) shall survive the expiration of the Rights and
the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
25
<PAGE>
endorsement, affidavit, letter, notice, instruction, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed and executed by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, by all of which the Corporation
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Corporation), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
advice or opinion.
26
<PAGE>
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Corporation prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the President, any Vice President, the Treasurer, the
Secretary or any Assistant Secretary of the Corporation and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Corporation of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of actual
notice of any such adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock
or Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Corporation will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the President, any Vice President, the Secretary, any Assistant Secretary, or
the Treasurer of the Corporation, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
27
<PAGE>
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any
officer of the Corporation actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
Rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Corporation resulting from any
such act, default, neglect or misconduct; provided, however, the Rights Agent
was not grossly negligent in the selection thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Corporation.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification appended to the form of assignment and the form of election to
28
<PAGE>
purchase attached hereto unless the Rights Agent shall have actual knowledge
that, as executed, such certification is untrue, or (ii) the non-execution of
such certification including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such non-execution.
(m) The Corporation shall give the Rights Agent prompt written
notice of any event or ownership that would prohibit the exercise or transfer of
the Rights Certificates.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Corporation, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail. The Corporation may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock, by registered or certified mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Corporation shall appoint a successor to the Rights Agent. If the
Corporation shall fail to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Corporation), then
the Rights Agent, at the expense of the Corporation, or any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be a corporation organized and
doing business under the laws of the United States or of the State of New York
(or of any other state of the United States), in good standing, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Rights Certificates evidencing Rights
in such forms as may be approved by its Board
29
<PAGE>
of Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Corporation (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Corporation, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Corporation, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Corporation shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Corporation may, at its
option, at any time prior to the earlier of (i) the close of business on the
tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights at
a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding any action taken by any
Person or Persons subsequent to the date hereof, the Corporation's right of
redemption hereunder may be exercised only by the Board of Directors of the
Corporation acting solely in its discretion in accordance with its fiduciary
duties to the Corporation and its shareholders. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Corporation's right of redemption hereunder has expired.
(b) The Corporation may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the "Current Market Price," as
defined in Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors of the Corporation.
(c) Immediately upon the action of the Board of Directors of
the Corporation ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
30
<PAGE>
Price for each Right so held. Promptly after the action of the Board of
Directors of the Corporation ordering the redemption of the Rights, the
Corporation shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Stock. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Exchange.
(a) By the vote of the Board of Directors of the Corporation,
the Corporation may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights which have become void pursuant to
Section 7(e) hereof) for shares of Common Stock at an exchange rate of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors of the
Corporation shall not be empowered to effect such exchange at any time after any
Person (other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan or employee stock plan of the Corporation or of any
Subsidiary of the Corporation, or any Person or entity organized, appointed or
established by the Corporation for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock of the Corporation then
outstanding.
(b) Without any further action and without any notice, the
right to exercise the Rights to be so exchanged will terminate immediately upon
the action of the Board of Directors of the Corporation ordering the exchange
and the only right thereafter of each holder of such Rights, subject to the
limitations set forth in paragraph (a) of this Section, shall be to receive that
number of shares of Common Stock equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Corporation shall promptly give
notice of the exchange to the Rights Agent and holders of such Rights then
outstanding by mailing such notice to all such holders at their last addresses
as they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such exchange. Each such notice shall state the method by which the
exchange for Rights will be effected and, in the event of a partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to Section 7(e) hereof) held by each holder of Rights. In
any exchange pursuant to this Section 24, the Corporation, at its option, may
substitute Preferred Stock (or equivalent preferred stock, as such term is
defined in paragraph (b) of Section 11 hereof) for Common Stock exchangeable for
31
<PAGE>
Rights, at the initial rate of one one-hundredth of a share of Preferred Stock
(or equivalent preferred stock) for each share of Common Stock, as appropriately
adjusted to reflect stock splits, stock dividends and other similar transactions
after the date hereof.
(c) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Corporation shall either take such action as may be
necessary to authorize additional Common Stock or Preferred Stock for issuance
upon exchange of the Rights or, alternatively, by the vote of the Board of
Directors of the Corporation with respect to each Right, (i) pay cash in an
amount equal to the Purchase Price, in lieu of issuing Common Stock or Preferred
Stock in exchange therefor or (ii) issue debt or equity securities, or a
combination thereof, having a value equal to the Current Value (as hereinafter
defined) of the Common Stock or Preferred Stock exchangeable for each such
Right, where the value of such securities shall be determined in good faith by
the Board of Directors of the Corporation or (iii) deliver any combination of
cash, property, Common Stock, Preferred Stock and/or other securities having a
value equal to the Current Value in exchange for each Right. The term "Current
Value," for purposes of this Section 24, shall mean the product of the per share
market price of the Common Stock (determined pursuant to Section 11(d) on the
date of the occurrence of the event described above in paragraph (a)) multiplied
by the number of shares of Common Stock for which the right otherwise would be
exchangeable if there were sufficient shares available. To the extent that the
Corporation determines that some action need be taken pursuant to clauses (i),
(ii) or (iii) of this Section 24(c), the Board of Directors of the Corporation
may temporarily suspend the exercisability of the Rights for a period of up to
sixty (60) days following the date on which the event described in Section 24(a)
shall have occurred, in order to seek any authorization of additional Common
Stock or Preferred Stock and/or to decide the appropriate form of distribution
to be made pursuant to the above provision and to determine the value thereof.
In the event of any such suspension, the Corporation shall issue a public
announcement, with simultaneous written notice to the Rights Agent, stating that
the exercisability of the Rights has been temporarily suspended.
(d) The Corporation shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock for purposes of this Section 24. In lieu of
such fractional shares of Common Stock, the Corporation shall pay to each
registered holder of a Rights Certificate with regard to which a fractional
share of Common Stock would otherwise be issuable an amount in cash equal to the
same fraction of the fair market value of a whole share of Common Stock. For the
purposes of this paragraph (d), the fair market value of a whole share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
32
<PAGE>
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend of the
Corporation in compliance with Section 55-6-40 of the North Carolina Business
Corporation Act), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Corporation in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Corporation and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Corporation and/or any of
its Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Corporation, then, in each such case, the Corporation shall give to each
holder of a Rights Certificate and to the Rights Agent, to the extent feasible
and in accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is
to take place and the date of participation therein by the holders of the shares
of Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least ten
(10) days prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any such other
action, at least ten (10) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of
Preferred Stock, whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Corporation shall as soon as practicable thereafter give
to each holder of a Rights Certificate and to the Rights Agent, to the extent
feasible and in accordance with Section 26 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Corporation shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
33
<PAGE>
Cone Mills Corporation
Attention: General Counsel
3101 North Elm Street
Greensboro, NC 27408
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:
First Union National Bank
Attention: Shareholder Services Group
1525 West W.T. Harris Boulevard, 3C3
Charlotte, NC 28288-1153
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Corporation.
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Corporation and
the Rights Agent shall, if the Board of Directors of the Corporation so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Corporation and the Rights Agent shall, if the Board of Directors of the
Corporation so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder or (iv) to change or supplement the provisions
hereunder in any manner which the Corporation may deem necessary or desirable
and which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Corporation which states that the proposed supplement
or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
34
<PAGE>
contained in this Agreement to the contrary, no supplement or amendment shall be
made that changes the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable or that advances the Final Expiration Date nor
may any amendment or supplement pursuant to this Section 27 alter in any adverse
manner the Rights Agent's rights or duties without the Rights Agent's consent.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Corporation shall have the
exclusive power and authority to administer this Agreement and to exercise the
rights and powers specifically granted to the Board of Directors or to the
Corporation, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board of Directors of the Corporation in good faith,
shall (x) be final, conclusive and binding on the Corporation, the Rights Agent,
the holders of the Rights and all other parties, and (y) not subject the Board
of Directors of the Corporation to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Corporation, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Corporation, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be
35
<PAGE>
invalid, void or unenforceable and the Board of Directors of the Corporation
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of North Carolina and for all purposes shall be governed by
and construed in accordance with the of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: CONE MILLS CORPORATION
By /s/ David K. Bradbury By /s/ Neil W. Koonce
-------------------- -------------------
David K. Bradbury Neil W. Koonce
Assistant Secretary Vice President, General Counsel
and Secretary
FIRST UNION NATIONAL BANK,
as Rights Agent
Attest:
By /s/ Myron O. Gray By /s/ Joan K. Kaprinski
----------------- ---------------------
Name: Myron O. Gray Name: Joan K. Kaprinski
Title: Vice President Title: Assistant Vice President
36
<PAGE>
Exhibit A
FORM OF ARTICLES OF AMENDMENT
of
CONE MILLS CORPORATION
The undersigned corporation hereby submits these Articles of Amendment
for the purpose of amending its Articles of Incorporation to fix the
designation, preferences, limitations, and relative rights of a series of its
Class B Preferred Stock:
1. The name of the corporation is Cone Mills Corporation.
2. The following resolution relating to the fixing of the designation,
preferences, limitations, and relative rights of the Class B Preferred Stock
(Series A) of the Corporation was duly adopted by the Board of Directors of the
Corporation at a meeting held on the 14th day of October, 1999, without
shareholder approval, which was not required because the Restated Articles of
Incorporation of the Corporation provide that the Board of Directors may
determine the preferences, limitations, and relative rights of that class:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (the "Board of Directors") by the Restated
Articles of Incorporation, the Board of Directors hereby creates a series of
Class B Preferred Stock (the "Class B Preferred Stock (Series A)"), of the
Corporation and hereby states the designation and number of shares, and fixes
the preferences, limitations, and relative rights thereof as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Class B Preferred Stock (Series A)" (the "Series A Class B
Preferred Stock"), and the number of shares constituting the Class B Preferred
Stock (Series A) shall be 500,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Class B Preferred Stock (Series A) to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Class B Preferred Stock (Series A).
2. Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any series of
capital stock ranking prior and superior to the Class B Preferred Stock (Series
A) with respect to dividends, the holders of shares of Class B Preferred Stock
(Series A), in preference to the holders of Common Stock (as defined in
paragraph 12 below), and of any Junior Stock (as defined in paragraph 12 below),
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in
cash on
A-1
<PAGE>
the first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Class B Preferred Stock (Series A), in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment hereinafter set forth 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Class B Preferred Stock (Series A). If the Corporation shall at any time after
October 14, 1999 (the "Rights Declaration Date") declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock ( by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Class B Preferred Stock
(Series A) were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) The Board of Directors shall declare a dividend or distribution on
the Class B Preferred Stock (Series A) as provided in subparagraph (a) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Class B Preferred Stock (Series A) shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Class B Preferred Stock (Series A) from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Class B Preferred Stock
(Series A), unless the date of issue of such shares is on or before the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue and be cumulative from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders of shares of
Class B Preferred Stock (Series A) entitled to receive a quarterly dividend and
on or before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Class B Preferred Stock (Series A) in an amount
less than the total amount of such dividends at the time accrued and payable on
such
A-2
<PAGE>
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Class B Preferred Stock (Series A)
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 60 days prior to the date fixed for the
payment thereof.
3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Class B Preferred Stock (Series A)
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Class B Preferred Stock (Series A) shall entitle the holder thereof to
100 votes on all matters submitted to a vote of shareholders of the Corporation.
If the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Class B Preferred Stock (Series A) were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Class B Preferred Stock (Series A) and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a vote
of shareholders of the Corporation.
(c) (i) If at any time dividends on any Class B Preferred Stock (Series
A) shall be in arrears in an amount equal to six quarterly dividends thereon,
the occurrence of such contingency shall mark the beginning of a period (a
"default period") that shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Class B Preferred Stock (Series A)
then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of shares of Class B Preferred Stock
(Series A), voting separately as a class, shall have the right to elect two
Directors.
(ii) During any default period, such voting right of the
holders of Class B Preferred Stock (Series A) may be exercised initially at a
special meeting called pursuant to subparagraph (c)(iii) below or at any annual
meeting of shareholders, and thereafter at annual meetings of shareholders;
provided that neither such voting right nor the right of the holders of Class B
Preferred Stock (Series A) to increase the authorized number of Directors may be
exercised at any meeting unless the holders of 20% in number of shares of Class
B Preferred Stock (Series A) outstanding shall be present in person or by proxy.
The absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Class B Preferred Stock (Series A) of such voting
right. At any meeting at which the holders of Class
A-3
<PAGE>
B Preferred Stock (Series A) shall exercise such voting right initially during
an existing default period, they shall have the right, voting separately as a
class, to elect Directors to fill up to two vacancies in the Board of Directors,
if any such vacancies may then exist, or, if such right is exercised at an
annual meeting, to elect two Directors. If the number that may be so elected at
any special meeting does not amount to the required number, the holders of
shares of Class B Preferred Stock (Series A) shall have the right to make such
increase in the number of Directors as shall be necessary to permit the election
by them of the required number. After the holders of Class B Preferred Stock
(Series A) shall have exercised their right to elect Directors during any
default period, the number of Directors shall not be increased or decreased
except as approved by a vote of the holders of Class B Preferred Stock (Series
A) as herein provided or pursuant to the rights of any equity securities ranking
senior to or pari passu with the Class B Preferred Stock (Series A).
(iii) Unless the holders of Class B Preferred Stock (Series A)
shall, during an existing default period, have previously exercised their right
to elect Directors, the Board of Directors may order, or any shareholder or
shareholders owning in the aggregate not less than 10% of the total number of
shares of Class B Preferred Stock (Series A) outstanding may request, the
calling of a special meeting of the holders of Class B Preferred Stock (Series
A), which meeting shall thereupon be called by the President, a Vice President
or the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Class B Preferred Stock (Series A) are entitled to
vote pursuant to this subparagraph (c)(iii) shall be given to each holder of
record of Class B Preferred Stock (Series A) by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 10 days and not later
than 60 days after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar notice by any shareholder or shareholders owning in the aggregate not
less than 10% of the total number of outstanding shares of Class B Preferred
Stock (Series A). Notwithstanding the provisions of this subparagraph (c)(iii),
no such special meeting shall be called during the 60 days immediately preceding
the date fixed for the next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and
any other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of Directors until the holders of Class B
Preferred Stock (Series A) shall have exercised their right to elect two
Directors voting as a class, after the exercise of which right (x) the Directors
so elected by the holders of Class B Preferred Stock (Series A) shall continue
in office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in subparagraph (c)(ii) above) be filled by
vote of a majority of the remaining Directors theretofore elected by the class
which elected the Director whose office shall have become vacant. References in
this subparagraph (c)(iv) to Directors elected by a particular class shall
include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the preceding sentence.
A-4
<PAGE>
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Class B Preferred Stock (Series A), as a separate
class, to elect Directors shall cease, (y) the term of any Directors elected by
the holders of Class B Preferred Stock (Series A), as a separate class, shall
terminate, and (z) the number of Directors shall be such number as may be
provided for in, or pursuant to, the Restated Articles of Incorporation or
Bylaws of the Corporation irrespective of any increase made pursuant to the
provisions of subparagraph (c)(ii) above (such number being subject, however, to
change thereafter in any manner provided by law or in the Restated Articles of
Incorporation or Bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (x) and (y) in the preceding sentence may be filled by
a majority of the remaining Directors.
(d) Except as set forth herein or as otherwise provided in the Restated
Articles of Incorporation, holders of Class B Preferred Stock (Series A) shall
have no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Class B Preferred Stock (Series A) as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Class B
Preferred Stock (Series A) shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, or make any other
distributions on, or redeem or repurchase or otherwise acquire for
consideration, any shares of Junior Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of Parity Stock (as defined in paragraph 12 below),
except dividends paid ratably on the Class B Preferred Stock (Series A) and all
such Parity Stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or repurchase or otherwise acquire for
consideration shares of any Parity Stock; provided, however, that the
Corporation may at any time redeem, repurchase or otherwise acquire shares of
any such Parity Stock in exchange for shares of any Junior Stock; or
(iv) repurchase or otherwise acquire for consideration any
shares of Class B Preferred Stock (Series A), or any shares of Parity Stock,
except in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
A-5
<PAGE>
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under subparagraph (a) above, purchase
or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Class B Preferred Stock (Series A)
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Class B Preferred Stock and may be reissued as part of a new series of Class B
Preferred Stock subject to the conditions and restrictions on issuance set forth
in this resolution, in the Restated Articles of Incorporation, or in any other
Articles of Amendment creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of Junior Stock unless,
prior thereto, the holders of shares of Class B Preferred Stock (Series A) shall
have received $1.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment; provided that the holders of shares of Class B Preferred Stock
(Series A) shall be entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of Common Stock, or (b)
to the holders of Parity Stock, except distributions made ratably on the Class B
Preferred Stock (Series A) and all such other Parity Stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Class B Preferred Stock (Series A) were
entitled immediately prior to such event under the proviso set forth in (a) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
7. Consolidation, Merger, etc. If the Corporation shall enter into any
consolidation, merger, share exchange, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination of the foregoing,
then in any such case each share of Class B Preferred Stock (Series A) shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash or any other property, as
the case may be, into which or for which each share of Common Stock is changed
or exchanged. If the Corporation shall at any time after the Rights Declaration
Date pay any dividend on Common
A-6
<PAGE>
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Class B Preferred Stock (Series A) shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. No Redemption. The Class B Preferred Stock (Series A) shall
not be redeemable.
9. Rank. The Class B Preferred Stock (Series A) shall rank
junior to all other series and classes of the Corporation's Preferred Stock as
to the payment of dividends and the distribution of assets, unless the terms of
any such series or class shall provide otherwise.
10. Amendment. The Restated Articles of Incorporation of the
Corporation, including, without limitation, this resolution, shall not be
amended in any manner (whether by merger, consolidation or otherwise) so as to
adversely affect the powers, preferences or special rights of the Class B
Preferred Stock (Series A) without the affirmative vote of the holders of a
majority of the outstanding shares of Class B Preferred Stock (Series A), voting
separately as a class.
11. Fractional Shares. Class B Preferred Stock (Series A) may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Class B Preferred Stock (Series A).
12. Certain Definitions. As used herein with respect to the Class B
Preferred Stock (Series A), the following terms shall have the following
meanings:
(a) "Common Stock" means the common stock, par value $0.10 per share,
of the Corporation at the date hereof or any other stock resulting from
successive changes or reclassification of the common stock.
(b) "Junior Stock" means the Common Stock and any other class or series
of capital stock of the Corporation hereafter authorized or issued over which
the Class B Preferred Stock (Series A) has preference or priority as to the
payment of dividends or distributions of assets upon any liquidation,
dissolution or winding up of the Corporation.
(c) "Parity Stock" means any class or series of capital stock of the
Corporation hereafter authorized or issued ranking pari passu with the Class B
Preferred Stock (Series A) as to the payment of dividends or distributions of
assets upon any liquidation, dissolution or winding up of the Corporation.
A-7
<PAGE>
IN WITNESS WHEREOF, Cone Mills Corporation has caused these Articles of
Amendment, which were duly adopted by the Board of Directors of the Corporation
on October 14, 1999, to be signed by its President on this _____ day of
________________, 1999.
CONE MILLS CORPORATION
By _________________________
John L. Bakane
A-8
<PAGE>
Exhibit B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _____________ Rights
NOT EXERCISABLE AFTER OCTOBER 13, 2009 OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
CONE MILLS CORPORATION
This certifies that _____________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of October 14, 1999 (the "Rights Agreement"), between Cone
Mills Corporation, a North Carolina corporation (the "Corporation"), and First
Union National Bank, a national banking association (the "Rights Agent"), to
purchase from the Corporation at any time prior to 5:00 p.m. (North Carolina
time) on October 13, 2009 at the office or offices of the Rights Agent
designated for such purpose, or its successor as Rights Agent, one one-hundredth
of a fully paid, nonassessable share of Class B Preferred Stock (Series A) (the
"Preferred Stock") of the Corporation, at a Purchase Price of $30 per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of October 14, 1999 based on the Preferred
Stock as constituted at such date. The portion of the legend in brackets shall
be inserted only if applicable and shall replace the preceding sentence.
- --------
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
<PAGE>
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
Corporation and are also available upon written request to the Corporation.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Corporation at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the close
of business on (i) the th Business Day following the Stock Acquisition Date, and
(ii) the Final Expiration Date. In addition, subject to the provisions of the
Rights Agreement, the Rights may be exchanged under certain circumstances by the
Corporation, in whole or in part, for shares of Common Stock, or for Preferred
Stock or shares of another series of Preferred Stock of the Corporation having
equivalent preferences, limitations and relative rights. Immediately upon the
action of the Board of Directors of the Corporation authorizing any such
exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such exchange.
B-2
<PAGE>
No fractional shares of Preferred Stock are required to be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Corporation, be evidenced by depositary receipts),
but in lieu thereof a cash payment may be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or any other securities of the Corporation which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement. This Rights Certificate shall not
be valid or obligatory for any purpose until it shall have been countersigned by
an authorized signatory of the Rights Agent.
WITNESS the facsimile signature of the duly authorized officers of the
Corporation and its corporate seal.
Dated as of __________, ____
ATTEST: CONE MILLS CORPORATION
By __________________ By ____________________
Secretary Title:
Countersigned: Date:
FIRST UNION NATIONAL BANK
By ________________________
Authorized Signatory
B-3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED ____________________________________ hereby sells, assigns
and transfers unto __________________________________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ________________________
Signature
Signature Guaranteed:
B-4
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as writ upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate)
To: CONE MILLS CORPORATION:
The undersigned hereby irrevocably elects to exercise
____________Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Corporation or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ______________
Signature
Signature Guaranteed:
B-6
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ______________
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-7
<PAGE>
Exhibit C
FORM OF SUMMARY OF RIGHTS TO PURCHASE
CLASS B PREFERRED STOCK (SERIES A)
On October 14, 1999, the Board of Directors of Cone Mills Corporation
(the "Corporation") authorized and declared a dividend distribution of one right
(a "Right") for each outstanding share of common stock, par value $.10 per
share, of the Corporation (the "Common Stock") payable on November 1, 1999 to
shareholders of record at the close of business on October 25, 1999. Each Right
entitles the registered holder to purchase from the Corporation a unit (a
"Unit") consisting of one one-hundredth of a share of Class B Preferred Stock
(Series A) of the Corporation (the "Preferred Stock"), at a Purchase Price of
$30 per Unit (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of October 14, 1999, between the Corporation and First
Union National Bank, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) ten days following public
announcement that a person or group of affiliated or associated persons, with
such exceptions as are set forth in the Rights Agreement (an "Acquiring
Person"), has acquired, or obtained the right to acquire, beneficial ownership
of 20% or more of the outstanding shares of Common Stock (the "Stock Acquisition
Date"), or (ii) ten Business Days (or such later date as the Board of Directors
may determine) following the commencement of, or first public announcement of
the intent of a person or group to commence, a tender offer or exchange offer
that would result in a person or group (with such exceptions as are set forth in
the Rights Agreement) beneficially owning 20% or more of such outstanding shares
of Common Stock. Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates issued after
October 25, 1999 will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for Common
Stock outstanding at the close of business on October 25, 1999 or thereafter
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 13, 2009, unless earlier redeemed or
exchanged by the Corporation as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock outstanding prior to the
Distribution Date will be issued with Rights.
C-1
<PAGE>
In the event that an Acquiring Person becomes the beneficial owner of
20% or more of the then outstanding shares of Common Stock, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Corporation), having a value equal to two times the Exercise Price of the Right.
The Exercise Price is the Purchase Price times the number of shares of Common
Stock associated with each Right (initially, one). Notwithstanding any of the
foregoing, following the occurrence of an event set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. However, Rights are not exercisable following the occurrence of an event
set forth in this paragraph until such time as the Rights are no longer
redeemable by the Corporation as set forth below.
In the event that, following the Stock Acquisition Date, (i) the
Corporation is acquired in a merger or consolidation in which the Corporation is
not the surviving corporation, (ii) the Corporation engages in a merger or
consolidation in which the Corporation is the surviving corporation and the
Common Stock of the Corporation is changed or exchanged, or (iii) more than 50%
of the Corporation's asset or earning power is sold or transferred, each holder
of a Right (except Rights which have previously been voided as set forth above)
shall thereafter have the right to receive, upon exercise of the Right, Common
Stock of the acquiring company having a value equal to two times the Exercise
Price of the Right.
The Purchase Price payable and the number of Units of Preferred Stock
or other securities or property issuable upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or securities convertible into
Preferred Stock at less than the current market price of the Preferred Stock, or
(iii) upon the distribution to holder of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Units of Preferred
Stock issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a dividend on the Common Stock
payable in Common Stock or subdivisions or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units are required to be issued and, in lieu thereof, an
adjustment in cash may be made based on the market price of the Preferred Stock
on the last trading date prior to the date of exercise.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Stock, the Board of Directors may
exchange the Rights (other than Rights owned by such person or its affiliates
and associates, which have become void), in whole or in
C-2
<PAGE>
part, at an exchange ratio of one share of Common Stock, or one one-hundredth of
a share of Preferred Stock (or of a share of a series of the Corporation's
preferred stock having equivalent preferences, limitations and relative rights),
per Right (subject to adjustment).
At any time until ten Business Days following the Stock Acquisition
Date, the Corporation may redeem the Rights in whole, but not in part, at a
price of $.01 per Right, subject to adjustment. Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
should not be taxable to shareholders or to the Corporation, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of the
Corporation as set forth above or in the event that the Rights are redeemed.
Except as set forth below, any of the provisions of the Rights
Agreement may be amended at the direction of the Board of Directors prior to the
Distribution Date. After the Distribution Date, any provision of the Rights
Agreement may be amended at the direction of the Board of Directors without the
approval of holders of Rights Certificates in order to make changes which do not
adversely affect the interests of holders of Rights Certificates (excluding the
interests of any Acquiring Person) or to shorten or lengthen any time period
under the Rights Agreement, except that no amendment to lengthen the time period
governing redemption may be made at such time as the Rights are not redeemable
nor may any other time period be lengthened except to protect the rights of
holders of Rights. In no case, however, may the Rights Agreement be amended to
change (other than pursuant to certain adjustments therein) the fraction of a
share of Preferred Stock for which a Right is exercisable or to advance the
Final Expiration Date.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Corporation.
This Summary Description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
C-3
